Tax portal glitches galore: 49% of India's taxpayers yet to file ITR

Over 4 crore returns have been filed as per Income Tax department as of July 22

With the deadline for Income Tax Returns (ITR) filing fast approaching on July 31, several taxpayers are facing hurdles in completing the process. A recent survey by LocalCircles revealed that a staggering 40% of those yet to file their ITR for the financial year 2023-24 have cited difficulties with the income tax portal as the primary reason for the delay.

The survey, conducted among 18,139 respondents, delved into the specific challenges taxpayers are encountering. While time constraints and document procurement were mentioned by a considerable portion of respondents, the inability to effectively navigate the tax portal emerged as the most significant obstacle. Issues such as system glitches, slow response times, and data discrepancies have been reported by numerous taxpayers.

Taxpayers have been encountering issues like login failures, unresponsive pages, timeouts, and problems reflecting pre-filled data and uploading large files. Inconsistent calculations for capital gains and foreign income tax have also been reported, as well as instances where filings were not reflected in records after submission. With just a few days left to file income tax return (ITR) by July 31, taxpayers are worried and have been using social media to air their difficulties in filing the returns and have been urging the government to extend the deadline. 

Several chartered accountant associations, including the Institute of Chartered Accountants of India (ICAI), Karnataka CA Association among other are reported to have formally written to the Income Tax Department about the various problems and sought an early resolution of the technical problems and extension of the deadline for filing the returns. 

Seeking to know how individuals who must file ITR are faring, the survey asked them, “How are you positioned to be able to file your individual income tax returns for FY 2023-24 by the current deadline of July 31, 2024?” Out of 19,865 who responded to the question 48% stated that they had “done it already”; 4% stated that they “have tried but had difficulty in filing. Will try again and file by July 31, 2024”; 16% of respondents stated they “haven’t done it yet but will comfortably do before July 31, 2024”; 18% of respondents stated that they “haven’t done and it will be significant effort doing it before July 31, 2024”; 11% of respondents stated that it will be “impossible to file by July 31, 2024”; and 2% of respondents did not give a clear answer. To sum up, 49% of income taxpayers surveyed are yet to file the return; 29% of them say it will be difficult to file FY 23-24 return by July 31.

The main reason cited by 4 in 10 who have not filed their ITR for 2023- 24 are difficulties with tax portal. Given the prevalence level of issues with the portal reported this year, unless something is likely to change within the next 48 hours on the portal stability front, the Income Tax Department may want to consider extending the filing deadline to August 15th or August 31st, 2024.

As of July 22nd, 2024, over 4 crore (40 million) ITRs have been filed, exceeding the number of returns filed during the same period in 2023 by more than 8%, said the Income Tax Department.

 The number of ITRs filed per day peaked at over 15 lakh (1.5 million) on July 16th, and this trend is expected to continue as the deadline of July 31st approaches.

 Compared to the previous year, taxpayers are filing their returns earlier. The milestones of 1 crore (10 million), 2 crore (20 million), and 3 crore (30 million) ITRs filed were achieved on June 23rd, July 7th, and July 16th, respectively.